[MISC.  PUBS. 


MEMORANDUM 


WITH  RESPECT  TO  PROPOSED  LEGISLATION 
WHICH  WOULD 


SEVER  and  DISJOIN 

THE 

FIFTH  WARD,  BOROUGH  OF  QUEENS 

FROM 

THE  CITY  OF  NEW   YORK 


AND  ERECT  SAID  FIFTH  WARD  INTO 
A  NEW  CITY,   TO   BE  KNOWN  AS 


ROCKAWAY    CITY 


SUBMITTED   TO 

Hon.  WILLIAM  A.  PRENDERGAST 

COMPTROLLER  OF  THE  CITY  OF  NEW  YORK 


BY 


CHIEF  ACCOUNTANT,  DEPARTMENT  OF  FINANCE 


MARCH     31,     1915 


THE    CITY    OF    NEW   YORK— DEPARTMENT   OF 

FINANCE. 

DIVISION  OF  CHIEF  ACCOUNTANT. 


MAECH  31,  1915. 
Hon.  WILLIAM  A.  PRENDERGAST, 

Comptroller. 

DEAR  SIR — In  accordance  with  your  directions  I  have  made  an 
examination  of  and  beg  to  submit  the  following  memorandum  with  re- 
spect to  Assembly  Bill  1392,  1645,  which  has  for  its  purpose  the 
lopping  off  of  the  Fifth  Ward,  Borough  of  Queens,  from  the  present 
City  of  New  York  and  erecting  said  Fifth  Ward  into  a  new  city,  to  be 
known  as  Rockaway  City. 

Yours  respectfully, 

DUNCAN  MAC!NNES, 

Chief  Accountant. 


RE   ROCKAWAY   CITY   BILL. 

QUESTIONABLE   LEGALITY   OF   LEGISLATURE   GRANTING    SECESSION 
TO  ANY  PART  OF  NEW  YORK  CITY: 

The  question  of  whether  the  former  City  of  Brooklyn  and  the 
former  municipalities  in  the  County  of  Queens  and  also  those  in  Rich- 
mond, would  become  consolidated  with  and  become  a  part  of  the 
Greater  City  of  New  York  was  submitted  to  the  people  at  a  general 
election,  and  it  was  only  because  a  majority  of  the  voters  decided  in 
the  affirmative  upon  the  creation  of  the  Greater  City  that  the  Charter 
bringing  it  into  legal  existence  was  passed. 

The  financial  confusion  and  danger  to  the  City  of  New  York  and 
the  probable  effect  upon  its  credit  which  may  result  from  irresponsible 
legislative  attempts  to  partition  the  City  by  creating  new  cities  from 
within  its  corporate  limits  is  fraught  with  such  far-reaching  possi- 
bilities  that  the  legality  of  this  legislative  procedure  should  be  sharply 
challenged  with  a  view  to  preventing  raids  of  a  like  kind  being  made 
at  any  time  from  any  other  quarter  or  part  of  the  Greater  City,  where 
some  local  dissatisfaction  either  with  the  administration  of  their  own 
part  of  a  Borough  or  with  some  official  may  exist. 

If  the  feeling  is  to  go  abroad  that  at  any  time  any  part  of  the 
City — large  or  small — may  get  a  complaisant  Legislature  to  listen  to 
appeals  for  secession  which  may  only  reflect  the  desire  of  certain  dis- 
satisfied people  or  ambitious  legislators,  and  that  such  secession  may 
be  granted,  the  feeling  thus  created  may  lead  to  a  fear  on  the  part  of 
investors  in  New  York  City  bonds  that  they  may  wake  some  day  to 
find  that  the  taxable  values  upon  which  both  payment  of  interest  and 
redemption  of  principal  of  their  securities  are.  based  have  waned 
materially,  and  that  they  may  be  called  upon  to  institute  proceedings 
to  assure  the  integrity  of  the  income  from  their  holdings  in  City  bonds. 

It  does  not  require  much  looking  ahead  to  see  that  if  such  a  fear 
should  enter  into  the  minds  of  dealers  and  investors  in  New  York  City 
securities  the  market  for  such  would  likely  be  seriously  impaired  and 
the  City's  credit  would  consequently  suffer.  It  would  not  require  any 

2 


wild  stretch  of  the  imagination  to  assume  that  if  the  people  of  the 
Fifth  Ward  of  the  Borough  of  Queens  succeed  in  their  secession 
movement  any  other  part  of  the  Greater  City  may  also  successfully 
raise  the  banner  of  secession,  and  great  financial  confusion  and  fear 
with  respect  to  the  validity  and  integrity  of  the  City's  debt  would 
undoubtedly  result. 

Article  I,  Section  X  of  the  Constitution  of  the  United  States 
provides  in  part  that — 

"  No  State  shall  pass  a  law  impairing  the  obligation  of  contracts." 

The  bonded  indebtedness  of  the  City  of  New  York  is  secured 
upon  the  assessed  valuation  of  taxable  real  estate  situate  within  the 
whole  City,  and  to  allow  any  part  of  the  City  to  secede  and  withdraw 
from  its  contractual  obligation  would  be  to  seriously  affect  the  security 
of  the  City's  debt.  Any  such  secession  statute  by  the  Legislature 
would  seemingly  be  unconstitutional,  because  it  would  be  in  effect 
a  law  impairing  the  obligation  of  contracts. 


NEW  ROCKAWAY  CITY  :  PP.  2/3 

The  bill  would  take  away  from  the  City  of  New  York  the  Fifth 
Ward,  Borough  of  Queens,  or  that  part  of  the  Borough  of 
Queens  which  formerly  constituted  the  Villages  of  Far  Rockaway, 
Arverne  and  Rockaway  Beach.  This  territory,  with  the  land  under 
water,  would  be  excluded  and  taken  away  from  the  present  City  and  a 
new  city  erected,  to  be  named  Rockaway  City. 

The  bill  provides  that  the  new  city  is  to  come  into  existence  on 
July  1,  1915  (Sec.  406,  p.  156). 

APPORTIONMENT  OF  DEBT:  PP.  6/7: 

Eockaway  City  shall  be  liable  for  its  proportion  of  the  debts,  de- 
mands and  claims  existing  against  the  City  of  New  York  at  the  time 
when  the  government  proposed  in  this  Act  shall  go  into  effect.  Such 
debts,  etc.,  to  be  ascertained  and  adjusted  as  provided  in  the  proposed 
Act. 

The  Mayor  and  the  Municipal  Assembly,  representing  the  City 
of  New  York,  or  a  commission  not  exceeding  five  members  to  be 
appointed  by  the  Mayor,  with  the  approval  of  the  Municipal 
Assembly,  to  represent  the  City  of  New  York,  and  the  City  Council 


of  Rockaway  City  or  a  commission  of  five  members  appointed  by  the 
City  Council  of  Rockway  City  to  constitute  a  Board  of  Auditors 
whose  duty  it  shall  be,  within  90  days,  to  ascertain  and  audit 
all  debts,  claims,  and  demands  against  the  City  of  New  York,  in- 
cluding outstanding  bonds,  and  adjust  the  amount  thereof  to 
be  paid  by  Rockaway  City  and  by  the  City  of  New  York  respectively 
in  proportion  to  the  respective  valuation  of  said  City  of  New  York 
and  Rockaway  City,  to  be  ascertained  from  the  last  assessment  roll 
of  the  City  of  New  York  made  prior  to  the  passage  of  the  proposed 
Act. 

REMARKS  RE  APPORTIONMENT  OF  DEBT  :  PP.  6/7 : 

The  debt  of  the  City  of  New  York,  consisting  of  claims  as  ad- 
justed, judgments  which  may  be  obtained,  awards  for  property,  etc., 
could  not  at  any  time  be  fully  determined  within  90  days.  There  are 
condemnation  proceedings  always  in  progress  which  sometimes  take 
months  before  the  amounts  of  the  awards  are  finally  determined,  and 
consequently  this  clause  in  the  proposed  Act,  whereby  the  debt  which 
would  require  to  be  assumed  by  the  new  city  is  to  be  ascertained 
and  determined,  could  not  be  fully  carried  into  effect  within  90  days. 


SUPREME  COURT  TO  DETERMINE  THE  EQUITABLE  PROPORTION  OF  DEBT 
TO  BE  BORNE  BY  EACH  CITY,  p.  9 : 

The  new  bill  provides  that  in  the  event  of  the  inability  of  the 
Board  of  Auditors  to  agree,  within  90  days,  upon  the  division  of  the 
debts,  the  Supreme  Court  in  the  Second  Judicial  District  would  be 
empowered  to  divide  the  same  between  the  two  cities  and  to  ascertain 
and  award  to  each  its  equitable  proportion  thereof,  to  be  determined 
according  to  the  relative  assessed  valuation  of  real  and  personal 
property  remaining  within  the  new  Rockaway  City  and  the  City  of 
New  York. 

REMARKS  RE  SUPREME  COURT  TO  DETERMINE  THE  EQUITABLE  PRO- 
PORTION OF  DEBT  TO  BE  BORNE  BY  EACH  CITY  :  p.  9 : 

This  part  of  the  law  would  make  it  appear  that  the  basis  for 
dividing  the  debt  to  be  assumed  by  each  one  of  the  two  municipalities 
would  be  the  relative  assessed  valuation  of  the  real  and  personal  prop- 
erty of  Rockaway  City  and  of  New  York  City.  It  is  very  important 
that  the  bill,  if  there  is  any  likelihood  of  its  passing,  should  be  amended 
in  this  respect  and  that  the  basis  of  division  should  be  the  relative 
assessed  valuation  of  all  real  estate  subject  to  taxation. 

4 


BOARD  OF  AUDIT,  PP.  3/7: 

The  Board  of  Auditors,  representing  the  City  of  New  York  and 
the  proposed  new  Rockaway  City,  is  to  make  a  statement,  in  tripli- 
cate, showing  the  amount  of  said  total  indebtedness  and  the  items 
thereof  and  the  apportioned  amount  thereof,  and  each  item  to  be 
paid  by  said  Rockaway  City  and  said  City  of  New  York  respectively. 
The  debt  of  the  proposed  new  Rockaway  City  and  of  the  City  of  New 
York  so  adjusted  to  be  paid  in  the  proportion  so  adjusted  the  same 
as  other  debts  existing  against  the  proposed  new  Rockaway  City 
and  the  City  of  New  York  respectively. 

REMARKS  RE-BOARD  OF  AUDIT,  PP.  3/7: 

The  partition  of  the  City  of  New  York  which  this  bill  would  carry 
into  effect  and  the  consequent  adjustment  of  the  debt  which  would 
follow  would  include,  among  other  things,  the  adjustment  of  the 
funded  debt.  The  latter  would  in  all  likelihood  prove  a  very  difficult 
task  because  it  is  not  reasonable  to  assume  that  any  holder  of  a 
New  York  City  bond  would  surrender  such  so  that  he  could  be  fur- 
nished with  a  new  issue  whereby  only  a  proportion  of  his  holdings 
would  be  represented  in  bonds  of  the  City  of  New  York  and  a  pro- 
portion by  bonds  of  the  new  Rockaway  City. 

WHAT  OF  BOND  HOLDER  WHO  WOULD  REFUSE  TO  EXCHANGE  A 
NEW  YORK  CITY  BOND  FOR  A  ROCKAWAY  CITY  BOND? 

Holders  of  New  York  City  bonds  could  refuse  to  surrender  them, 
and  it  does  not  seem  that  any  statute  could  be  legally  enacted  by  which 
holders  of  New  York  City  bonds  could  be  compelled  to  surrender  them 
and  be  required  to  accept  bonds  of  another  city  in  lieu  of  a  certain 
share  or  proportion  of  the  original  New  York  City  bonds. 

The  bill  by  which  the  new  Rockaway  City  would  be  created  pro- 
vides that  the  Board  of  Auditors  representing  the  City  of  New  York 
and  the  proposed  Rockaway  City  shall  prepare  a  statement  showing 
the  amount  of  the  total  indebtedness  and  the  items  thereof,  and  the 
apportioned  amount  and  the  items  to  be  paid  by  Rockaway  City  and 
by  the  City  of  New  York  respectively.  This  is  merely  a  jingle  of 
words,  as  it  would  be  practically  impossible  to  adjust  the  indebtedness 
between  the  two  municipalities  by  items.  The  adjustment  would 
require  to  be  upon  some  agreed  proportion.  It  could  not  be  deter- 
mined according  to  items. 


To  illustrate:  The  total  amount  of  one  contract,  although  it 
might  be  equal  to  a  stated  proportion  of  the  entire  contract  debt, 
could  not  be  set  aside  as  that  item  or  part  of  the  contract  debt  which 
was  to  be  assumed  by  Rockaway  City,  nor  could  any  particular 
numbered  bonds  of  some  particular  issues  be  set  aside  as  items  of 
the  debt  to  be  accepted  and  borne  by  the  new  Rockaway  City  even 
though  in  their  aggregate  such  bonds  might  represent  the  stated  pro- 
portion of  the  funded  debt  which  the  new  City  of  Rockaway  was  to 
assume.  It  will  therefore  be  seen  that  the  adjustment  of  the  debt  as 
between  the  City  of  New  York  and  the  proposed  new  city  could 
not  in  any  instance  be  based  upon  items  to  be  placed  upon  the  City  of 
New  York  or  upon  Rockaway  City  respectively. 

The  creditor  of  the  City  of  New  York,  whether  he  be  bond  holder 
or  contractor,  would  consider  it  was  no  concern  of  his  as  to  how  the 
debt  between  the  two  municipalities  was  to  be  adjusted.  His  debtor 
is  the  City  of  New  York,  and  it  is  to  the  City  of  New  York  that  the 
bond  holder  will  look  for  his  interest  and  for  the  ultimate  redemption 
of  his  bond  when  it  matures,  and  it  is  to  the  City  of  New  York  the 
contractor  will  look  for  payments  on  his  contract  as  the  work  progres- 
ses, because  it  is  with  the  City  of  New  York  his  contract  is  made,  and 
it  is  not  reasonable  to  assume  that  either  bond  holder  or  contractor 
would  willingly  relieve  the  City  of  New  York  of  any  part  of  its  lia- 
bility to  them  and  accept  in  lieu  thereof  the  promise  of  Rockaway  City 
to  pay  them  bond  interest  or  to  liquidate  their  obligations  of  whatever 
kind,  when  they  became  due. 

Nowhere  in  the  Bill  is  there  any  provision  for  the  raising  of  money 
or  to  provide  for  an  issuance  of  bonds  to  pay  a  debt  of  Rockaway  City 
to  the  City  of  New  York,  should  such  an  unlooked  for  contingency 
arise;  but,  as  will  be  shown  hereinafter,  there  is  little  possibility  that 
any  such  debt  would  be  established  against  Rockaway  City.  Conse- 
quently there  was  apparently  no  need,  in  the  minds  of  the  framers, 
to  provide  for  any  specific  method  for  liquidating  such  an  improbable 
charge  other  than  in  the  general  language  of  the  Bill  that  such  would 
be  "  adjusted  the  same  as  other  debts." 

THE  NEW  CITY'S  DEBT  AND  DEBT  LIMIT  : 

The  1915  assessed  valuation  of  taxable  real  estate  in  the  Fifth 
Ward,  Borough  of  Queens,  is  $48,877,885.  The  total  assessed  valua- 
tion of  taxable  realty  within  the  corporate  limits  of  the  Greater 

6 


City  of  New  York  (including  the  Fifth  Ward,  Borough  of  Queens) 
is  $8,108,764,237.  The  assessed  valuation  of  the  taxable  real  estate 
situate  in  the  Fifth  Ward,  Borough  of  Queens,  is  approximately 
6/10ths  of  one  per  centum  of  the  grand  total  of  the  1915  assessed 
valuation  of  all  taxable  realty  within  the  City  of  New  York. 

On  the  basis  of  the  present  net  bonded  debt  and  the  present  con- 
contract  liability  Rockaway  City  would  be  required  to  assume  a 
debt  of  approximately  $7,000,000,  and  the  constitutional  right  of 
the  new  city  to  incur  debt  would  be  limited  to  $4,887,788,  or  upwards 
of  $2,000,000  more  than  the  debt  which  the  new  city  would  require  to 
assume.  The  debt  as  thus  approximated  at  $7,000,000  would  not 
include  any  budget  appropriations  of  the  year  1915.  It  would  only 
include  the  new  city's  share  of  the  net  bonded  debt  and  of  the  net 
contract  liability  as  approximated  on  February  28,  1915. 

EFFECT  UPON  CITY'S  DEBT  AND  UPON  CITY'S  DEBT  LIMIT  : 

If  the  City  of  New  York  was  to  be  dismembered  to  the  extent 
outlined  by  the  bill  seeking  to  create  the  new  Rockaway  City  taxable 
realty  values  aggregating  $48,877,885  would  be  taken  away  from  the 
total  real  estate  assessed  valuation  of  the  City  of  New  York  for  the 
year  1915.  This  in  turn  would  mean  that  the  City's  constitutional 
right  to  incur  debt  would  be  decreased  by  $4,887,788;  that  is,  the 
margin  within  the  debt  limit  of  $56,792,917  as  of  January  2,  1915, 
would  be  decreased  to  $51,905,129,  and  the  $19,157,312  of  unreserved 
margin  which  at  that  date  was  available  for  further  authorization 
would  be  decreased  to  $14,269,524. 

While  this  decrease  of  the  City's  constitutional  debt-incurring 
power  would  result  when  the  bill  went  into  effect  on  July  1,  1915,  and 
the  new  Rockaway  City  was  created,  it  does  not  seem  that  the  debt 
of  the  City  of  New  York  would  be  any  less,  because  any  apportion- 
ment of  the  debt  which,  as  a  result  of  the  act,  would  be  placed 
upon  Rockaway  City,  could  be  thus  placed  only  for  the  purpose  of 
a  settlement  as  between  the  two  cities.  As  already  stated,  it  does 
not  seem  clear  how  any  part  of  the  bonded  debt  of  the  City  of  New 
York  could  be  shifted,  so  far  as  the  bond  holders  are  concerned,  from 
the  city  issuing  the  bond  to  another  city.  The  bond  holders,  it  would 
seem,  would  always  look  to  the  City  of  New  York  for  payment  of 
their  bonds,  and  the  responsibility  would  not  rest  upon  them  to  deter- 


mine  how  the  City  of  New  York  was  to  collect  that  part  of  the  debt 
which  would  require  to  be  assumed  by  the  new  city.  The  same  logic 
would  also  apply  to  contract  liabilities.  Consequently  it  would  seem 
that  the  constitutional  debt  of  the  City  of  New  York  would  not  be 
lessened  or  decreased  by  the  creation  of  the  new  Rockaway  City,  while 
the  power  of  the  City  of  New  York  to  incur  debt  would  be  decreased 
to  the  extent  of  ten  per  cent,  of  the  assessed  valuation  of  all  of  the 
taxable  realty  within  the  Fifth  Ward  of  the  present  Borough  of 
Queens,  which  is  the  territory  wherein  the  banner  of  secession  has  been 
raised. 

As  has  already  been  pointed  out  herein,  the  indebtedness  of  the 
City  of  New  York  is  secured  upon  the  aggregate  assessed  valuation 
of  all  taxable  real  estate  situate  within  the  corporate  limits  of  the  whole 
City,  and  should  any  part  of  the  City  be  allowed  to  secede  and  with- 
draw from  its  contractual  obligations  to  meet  its  proportional  share  of 
the  debt,  the  result  would  be  to  seriously  affect  the  security  of  the 
City's  outstanding  debt  and  to  impair  its  credit. 

TITLE  TO  REAL  AND  PERSONAL  PROPERTY  OWNED  BY   THE   CITY 

OF  NEW  YORK,,  PP.  8/9 : 

The  Rockaway  City  bill  provides  that  the  title  to  the  real  and 
personal  property  belonging  to  the  City  of  New  York  situate  within 
the  boundary  of  the  proposed  new  city  shall  vest  in  said  Rockaway 
City,  and  the  title  to  real  and  personal  property  situate  within  the 
limits  of  said  City  of  New  York  and  title  to  all  other  real  and  per- 
sonal property  owned  by  the  City  of  New  York  outside  the  limits 
of  said  city  and  not  within  the  limits  of  the  proposed  Rockaway 
City,  shall  vest  in  the  City  of  New  York,  and  the  value  thereof  shall 
be  adjusted  as  hereinbefore  provided,  and  the  balance  in  adjustment 
and  appraisal  of  realty  and  personalty  shall  be  debited  against  the 
proposed  Rockaway  City  or  the  City  of  New  York,  as  the  case  may 
be,  and  shall  be  paid  as  any  other  debts  upon  the  day  when  the  gov- 
ernment provided  in  the  proposed  act  goes  into  effect. 

ROCKAWAY  CITY'S  EQUITY  ix  THE  APPRAISED  VALUE  OF  ALL 

REAL  AXD  PERSONAL  PROPERTY  Now  OWNED  BY  THE 

CITY  OF  NEW  YORK  WHEREVER  SITUATE: 

The  foregoing  is  a  very  dangerous  provision  in  the  Bill. 

It  provides  that  the  title  to  the  real  and  personal  property 
belonging  to  the  City  of  New  York  situate  within  the  boundary 

8 


of  the  proposed  new  Rockaway  City  shall  vest  in  Rockaway  City, 
and  the  title  to  the  real  and  personal  property  owned  by  the  City  of 
New  York  situate  within  the  limits  of  the  City  (outside  of  Rockaway 
City),  and  the  real  and  personal  property  owned  by  the  City  of  New 
York  outside  of  the  City  limits,  shall  vest  in  the  City  of  New  York. 

The  Board  of  Audit,  composed,  it  may  be  noted,  of  five  mem- 
bers representing  New  York  City  and  five  members  representing 
Rockaway  City,  are  also  to  apportion  in  the  same  manner  (accord- 
ing to  relative  assessed  values  of  real  and  personal  property)  all 
securities,  evidences  of  debt,  property  and  effects  as  the  same  may  be 
valued  by  it,  between  Rockaway  City  and  the  City  of  New  York. 

The  value  of  the  real  and  personal  property  (except  such  real 
property  as  is  used  for  highway  purposes)  is  to  be  ascertained  and 
determined  by  appraisal.  That  is  to  say,  the  value  of  all  real  and  per- 
sonal property  now  owned  by  the  City  of  New  York  situate  within 
and  situate  without  the  corporate  limits  of  the  City  is  to  be  appraised, 
and  the  value  as  thus  determined  is  to  be  adjusted  between  Rockaway 
City  and  the  City  of  New  York,  as  the  case  may  be,  and 

"  *     *     *     shall  be  paid  as  any  other  debts  upon  the  day  when 
the  .government  provided  for  in  this  act  goes  into  effect." 

that  is  to  say,  on  the  day  when  Rockaway  City  should  be  created. 

The  effect  of  this  clause  in  the  Rockaway  City  Bill,  if  enacted 
into  law,  would  be  that,  assuming  the  basis  of  adjustment  of  debits 
and  credits,  to  be  in  the  neighborhood  of  say  6/1  Oth  of  one  per  cent,  of 
the  debts  to  be  charged  to  Rockaway  City  and  6/10ths  of  the  appraised 
value  of  all  City  property  to  be  credited  to  the  new  city,  it  would  in 
all  likelihood  be  found  that  Rockaway  City  would  enter  upon  its  career 
with  several  millions  of  dollars  owing  to  it  by  the  City  of  New  York, 
to  be  paid  upon  the  day  when  Rockaway  City  would  be  erected  into 
a  city. 

A  careful  reading  and  thoughtful  study  of  this  particular  provi- 
sion in  the  Rockaway  City  Bill  will  show  that  the  purpose  of  the 
framers  was  by  this  method  to  obtain  a  clean  start  in  the  beginning, 
free  from  all  debt  and  with  a  large  credit  balance  due  to  them  by  the 
City  of  New  York  upon  which  they  could  draw  and  thus  relieve  them- 
selves of  the  need  of  levying  any  taxes  for  at  least  the  first  two  or 
three  years  of  their  existence  as  a  city.  This  clause  in  the  bill  would 


give  them  an  equity  in  certain  property  of  the  City  of  New  York  which 
was  entirely  paid  for  twenty  years  or  more  ago.  It  seeks  to  give  them 
an  equity  and  an  interest  in  property  which  may  have  been  deeded  to 
the  City  of  New  York  fifty  years  ago,  and  it  may  be,  further  back. 
It  seeks  to  give  them  an  equity  in  property  which  belonged  to  the 
former  City  of  Brooklyn  and  the  various  municipalities  in  what  is 
now  known  as  the  Borough  of  Brooklyn.  In  short,  it  seeks  to  give 
them  an  equity  in  the  appraised  value  of  real  and  personal  property, 
which,  in  the  aggregate,  would  in  all  likelihood  be  nearly  twice  as 
great  as  the  net  debt  of  the  City  of  New  York,  and  consequently, 
while  the  new  Rockaway  City  would  bear  its  proportion  of  the  net 
debt,  it  is  seeking  to  get  as  a  credit  a  proportion  of  the  appraised  value 
of  City  property,  towards  the  acquirement  of  which  the  property  and 
property  owners  of  Rockaway  City  never  expended  a  dollar. 

This  clause  in  the  bill  means  that  the  appraised  value  of  the 
Croton  watershed  and  water  supply  system;  of  the  new  Catskill 
Aqueduct  and  of  all  its  supply  mains  and  storage  reservoirs;  of 
Central  Park,  the  Bronx  Park,  and  Prospect  Park ;  of  the  new  Munici- 
pal Building;  of  the  appraised  value  of  the  Manhattan-Bronx  and 
Brooklyn-Manhattan  subways,  which  have  been  in  operation  since 
1904,  and  of  the  new  subways  which  are  building;  of  all  the  fire  engine 
houses,  police  precinct  stations;  of  all  the  school  houses,  colleges  and 
libraries  owned  by  the  City — in  short,  the  appraised  value  of  all  the 
property,  real  and  personal,  owned  by  the  City,  which  would  probably 
appraise  at  from  one  billion  and  a  half  to  a  billion  seven  hundred  or 
eight  hundred  millions  of  dollars,  would  be  apportioned  between 
Rockaway  City  and  the  City  of  New  York  proportionally  on  the  basis 
of  the  relative  assessed  valuation  of  taxable  property  within  the 
corporate  limits  of  the  new  Rockaway  City  and  the  assessed  valua- 
tion of  taxable  property  within  the  City  of  New  York,  as  the  latter 
would  exist  after  its  partial  dismemberment  by  the  erection  of  Rocka- 
way City. 

The  effect  of  this,  as  I  have  already  stated  herein,  would  be  in  all 
likelihood  to  give  the  new  Rockaway  City  such  an  equity  in  property 
values  as  to  provide  that : 

The  balance  in  adjustment  and  appraisal  of  realty  and 
personalty  would  not  be  debited  against  Rockaway  City  but 
would  be  debited  against  the  City  of  New  York,  and  would 

10 


require  to  be  paid  by  the  latter  named  City  upon  the  day  when 
the  new  Rockaway  City  was  created. 

This  would  mean  that  the  balance  owing  to  Rockaway  City  of 
probably  several  millions  would  bear  interest  from  July  1st,  should 
the  bill  go  into  effect  then,  and  as  the  new  Rockaway  City  would  re- 
ceive nearly  all  of  the  taxes  of  1915  payable  in  the  Fifth  Ward,  Bor- 
ough of  Queens,  on  November  1,  1915  (second  half  of  the  1915  tax), 
and  would  not  require  to  continue  in  office,  except  as  it  preferred,  any 
officer,  fireman,  policeman  or  other  employee  of  the  City  of  New 
York,  it  may  readily  be  seen  that  it  would  not  require  to  take  any  steps 
whatever  to  provide  any  additional  funds  for  1915  other  than  the 
taxes  payable  to  it,  and  for  1916  and  1917  and  perhaps  longer  it  would 
apparently  be  in  a  position  to  draw  upon  the  City  of  New  York  from 
the  money  owing  to  it  by  the  latter  in  the  equity  which  would  arise  from 
an  appraisal  of  property  values  which  Rockaway  City  nor  the  prop- 
erty or  the  property  owners  within  its  proposed  corporate  limits  ever 
paid  a  dollar  to  acquire. 

It  will  thus  be  seen  that  New  York  City  would  not  only  be  shorn, 
for  revenue  purposes  and  debt-incurring  power,  of  the  assessed  valua- 
tion of  all  the  taxable  realty  within  the  corporate  limits  of  the  new 
Rockaway  City  without  any  reduction  in  the  debt  of  the  City  of  New 
York,  but  it  would  likely  have  several  million  dollars  more  added 
to  its  present  debt  by  reason  of  the  provision  in  the  Rockaway  City 
Bill  with  respect  to  the  so-called  adjustment  of  the  appraised  value 
of  all  of  the  property  now  owned  by  the  City — real  and  personal — no 
matter  where  situate ;  and  as  that  balance  or  debt  owing  to  Rockaway 
City  would  take  effect  on  the  day  when  Rockaway  City  would  become 
a  city  it  would  consequently  bear  interest  from  such  date  until  the 
different  dates  upon  which  portions  of  the  debt  would  be  liquidated. 

LAND  UNDER  WATER. 

The  new  Rockaway  City  would  include  all  that  territory  within 
the  County  of  Queens  and  the  City  of  New  York  now  known  as  Ward 
Five  of  the  Borough  of  Queens,  with  the  land  under  water  and 
hassocks  adjacent  thereto.  This  is  another  dangerous  provision  in 
the  bill.  Vesting  the  new  city  with  all  right,  title  and  interest  to 
the  land  under  water  in  Jamaica  Bay  would  mean  conflict  between 

11 


it  and  the  City  of  New  York  concerning  the  Jamaica  Bay  Improve- 
ment. 

TAXES  :  PP.  155/150 : 

The  bill  provides  that  all  taxes  due  and  payable  to  the  City  of 
New  York  on  May  1,  1915,  from  property  and  persons  within  the 
Fifth  Ward,  Borough  of  Queens,  that  is,  within  the  territory  to  be 
excluded  from  the  City  by  the  proposed  act,  which  remain  unpaid 
on  July  1,  1915,  shall  be  thereafter  collected  by  Rockaway  City  and 
paid  by  it  as  collected  to  the  City  of  New  York,  and  that  all  taxes 
due  and  payable  after  July  1,  1915,  from  property  and  persons 
within  said  territory  shall  be  collected  and  retained  by  Kockaway 
City. 

REMARKS  RE  TAXES:  PP.  155/156: 

This  provision  in  the  bill  apparently  means  that  the  first  half  of 
the  1915  tax  upon  realty,  which  is  payable  on  May  1st,  shall  all  go  to 
the  City  of  New  York,  and  all  of  the  second  half  of  such  tax  shall  go 
to  Rockaway  City. 

The  very  significant  provision  in  the  act  which  would  create  Rock- 
away  City  on  July  1st,  giving  it  sovereign  municipal  power  from  said 
date  and  with  it  the  second  half  of  the  taxes  levied  by  the  City  of  New 
York  for  the  year  1915,  is  bad.  If  any  part  of  the  City  of  New  York 
is  to  be  lopped  off  for  the  purpose  of  creating  a  new  city,  such  dis- 
memberment should  never  be  made  to  take  effect  at  any  time  except 
at  the  beginning  of  a  new  fiscal  year.  The  City  of  New  York  is 
necessarily  borrowing  money  in  anticipation  of  the  collection  of  its  tax 
levy  for  the  year  1915,  and  from  the  collection  of  these  taxes  the  out- 
standing revenue  obligations  of  the  City,  upon  which  it  has  been 
raising  money  to  meet  current  budget  expenses,  must  necessarily  be 
redeemed.  Yet  the  bill  seeking  to  create  the  new  city  would  take 
away  from  the  City  of  New  York  one-half  of  the  tax  levy  of  the  year 
1915  wrhich  is  now  payable  from  property  situate  and  from  persons 
living  within  the  Fifth  Ward  of  the  Borough  of  Queens. 

PREFERENCE  OF  EMPLOYEES:  p.  158: 

Section  412,  p.  158,  of  the  Assembly  Bill  as  amended  provides 
that  all  officers,  firemen,  policemen  and  other  employees  of  the  City 
of  New  York  now  performing  duties  within  the  Fifth  Ward  of  the 

12 


Borough  of  Queens,  (which  is  to  be  lopped  off  from  the  City),  shall 
have  the  preference  over  all  others  for  the  positions  which  they  now 
hold,  unless  said  positions  are  abolished  by  the  Rockaway  City 
Council.  Nothing  contained  in  the  act,  however,  shall  in  any  way 
affect  their  standing  as  employees  of  the  City  of  New  York  if  such 
officers,  firemen,  policemen  and  other  employees  of  the  City  elect  to 
retain  their  present  positions  with  the  City  of  New  York. 

The  section  referred  to  also  contains  the  further  provision  that 
nothing  therein  contained  shall  be  construed  as  preventing  the 
officials  of  Eockaway  City  from  abolishing  any  position  or  from  the 
creation  of  new  ones  by  dispensing  with  the  services  of  any  officer, 
fireman,  policeman  or  other  employee  now  performing  services  in 
said  territory. 


REMARKS  re  PREFERENCE  OF  EMPLOYEES: 

This  part  of  the  proposed  new  city  charter  indicates  that  it 
would  have  the  right  to  abolish  any  position  which  it  pleased,  and 
that  the  City  of  New  York  would  be  required  to  retain  all  employees 
who  would  elect  to  remain  in  their  present  positions  with  the  City 
of  New  York,  and  also  all  employees  whom  the  new  Rockaway 
City  did  not  wish  to  retain.  In  other  words,  the  proposed  act  would 
not  make  it  compulsory  or  incumbent  upon  Rockaway  City  to 
retain  the  present  complement  of  officials,  firemen,  policemen  or 
other  employees  performing  duties  within  the  Fifth  Ward  of  the 
Borough  of  Queens,  but  it  would  be  mandatory  upon  the  City  of  New 
York  to  continue  the  employment  of  any  such  officers,  firemen,  police- 
men and  other  employees,  among  whom  would  probably  be  included 
school  teachers,  who  should  elect  to  retain  their  present  positions  with 
the  City  of  New  York. 

The  salary  ratings,  civil  service  requirements,  etc.,  would  all  be 
in  the  hands  of  the  Commission  form  of  government  of  the  new  city, 
and  as  it  would  entirely  rest  with  them  as  to  what  employees  it  should 
continue  it  is  not  very  difficult  to  see  that  the  large  number,  if  not  all, 
of  these  employees,  including  school  teachers,  would  prefer  to  remain 
with  the  City  of  New  York  under  salaries  already  fixed  by  law,  and 
which  in  all  likelihood  are  higher  than  the  salaries  which  would  be  fixed 
by  the  new  city  officials  to  begin  with. 

This  is  a  most  unfair,  inequitable,  and  iniquitous  provision  in  the 
Bill,  and  with  the  other  provisions  referred  to  herein,  emphasize  the 

13 


necessity  of  every  sentence  of  the  new  Bill  being  carefully  and 
thoughtfully  analyzed. 


DIVISION  OF  UNAPPROPRIATED  MONEYS  BETWEEN 
NEW  YORK  AND  ROCKAWAY  CITY  : 

The  new  Rockaway  City  bill  provides  that  all  unexpended 
moneys  belonging  to  the  City  of  New  York,  excepting  moneys 
specifically  appropriated,  shall,  within  90  days  thereafter,  be  appor- 
tioned by  the  Board  of  Auditors  between  Rockaway  City  and  the 
City  of  New  York  on  a  basis  represented  by  the  proportion  of  the 
valuation  of  the  new  Rockaway  City  and  the  City  of  New  York. 


REMARKS  RE  DIVISION  OF  UNAPPROPRIATED  MONEYS  BETWEEN 
NEW  YORK  CITY  AND  ROCKAWAY  CITY  : 

The  bill  is  not  very  clear  as  to  whether  the  valuation  referred  to 
here  means  the  taxable  real  estate  alone.  If,  however,  the  bill  is  to  be 
looked  upon  seriously  an  amendment  to  it  in  this  respect  should  be 
made,  and  it  should  be  clearly  shown  that  it  would  be  upon  the  valua- 
tion of  the  real  estate  subject  to  taxation  as  ascertained  from  the 
latest  assessment  rolls  of  the  City  of  New  York  made  prior  to  the 
passage  of  the  act;  that  is  to  say,  upon  the  1915  assessed  valuation 
of  taxable  realty. 

The  clause  with  respect  to  unexpended  moneys  not  specifically 
appropriated  would  likely  cause  a  great  deal  of  trouble  and  confusion. 
Such  moneys  are  to  be  apportioned  to  the  proposed  Rockaway  City 
and  to  be  paid  over  to  the  Commissioners  of  Finance  to  the  credit  of 
the  general  fund  of  the  proposed  new  city,  and  the  amount  appor- 
tioned to  the  City  of  New  York  is  to  be  paid  to  the  Comptroller. 

There  is  seldom  any  money  in  the  Treasury  of  the  City  of  New 
York  of  which  it  can  be  freely  said  that  it  is  not  appropriated  for 
some  purpose.  At  the  close  of  the  year  the  balance  remaining  in  the 
General  Fund  over  and  above  the  amount  appropriated  to  meet  the 
budget  appropriations  for  said  year  would  represent  an  amount  not 
specifically  appropriated.  It  might  also  be  said  that  the  balance  in  the 
Excise  Fund  likewise  represented  an  amount  not  specifically  appro- 
priated, but  all  other  moneys  in  the  City  Treasury  are  practically 

14 


appropriated  for  one  purpose  or  another  and  yet  an  analysis  to 
establish  and  prove  what  moneys  were  not  specifically  appropriated 
would  likely  be  costly  and  cause  trouble  and  confusion. 


The  foregoing  memorandum  does  not  profess  to  cover  every  bad 
clause  in  the  bill  or  those  which  would  prove  unworkable.  It  has  only 
dealt  with  some  of  its  outstanding  features.  It  will  only  require  a 
careful  reading  by  those  familiar  with  governmental  administration 
and  the  tax  laws  of  the  State  to  see  the  likely  complications  and 
litigious  proceedings  which  would  arise  regarding  tax  liens;  effects 
upon  titles  to  property;  State  and  County  taxes,  etc.,  if  this  Rockaway 
City  Bill  were  enacted  into  law. 


M.  B.  BROWN   PRINTING   ft   BINDING  CO 
17-41    CHAMBERS    ST..  NEW    YORK  CITY 


